It was Israel’s fastest quarterly growth rate since 2007. The figures from the Central Bureau of Statistics were preliminary, however, meaning they could be revised.

Moreover, economists noted that the growth represented a catch-up after the third quarter, when activity was sharply slowed by the summer Gaza war.

“The surprise growth rate in the fourth quarter doesn’t reflect a spurt in economic activity,” said Alex Zabezhinsky, chief economist at Meitav Dash Investment House. He noted that economic growth also rebounded after Israel’s previous short wars over the past decade.

But he added: “The economy is certainly not in a slowdown or a recession. It’s growing at a pretty fast pace of about 3%, which is enough to make many other countries jealous.”

In fact, the CBS figures showed that GDP growth slowed somewhat in the second half of the year, to a 2.6% annual rate from 2.7% in the first half and 3.4% a year earlier.

Quarterly GDP growth, annualized rateCredit: Haaretz

Nevertheless, the numbers represented a sharp turnaround from last summer, when many economists warned that an economic slowdown that had begun in early 2014 would constrain Israel’s ability to climb out of the wartime slowdown.

The Tel Aviv Stock Exchange greeted the news by lifting share prices.

In the bond market, the reaction was more confused. Traders had been bidding up bond prices all morning on Monday after the CBS reported on Sunday that the January consumer-price index had dropped 0.9%, spurring expectations that the Bank of Israel would lower interest rates as early as next week.

But the GDP report in the afternoon prompted bond traders to reverse course since news of a rapidly growing economy could give the central bank pause.

For all that, investors had third thoughts later in the afternoon and bond prices rose again.

The currency market was similarly volatile. Sunday’s CPI report caused the dollar to appreciate to as much as 3.91 shekels. But that gain was trimmed back to 3.89 by the time the Bank of Israel fixed its official rate for the day, and the buck pulled back further in late trading.

Fourth-quarter GDP growth was led by a 12.2% increase in government spending, which Ofer Klein, chief economist at Harel Insurance & Finance, ascribed at least in part to rearming following the summer fighting.

Consumer spending was also up sharply, rising at a 6.8% rate for the quarter. Consumers, encouraged by low interest rates, splurged on durables, particularly cars.

Exports of goods and services rose at a 7.3% annual rate, although for the second half they were ahead just 0.6%, in large part due to plunging tourist arrivals during the fighting. Imports were down, at a 1.5% annual rate, in the fourth quarter.

Investment rose at an 8.7% rate in the final three months of the year, ending three straight quarterly declines. Residential construction, which had been depressed in part by the government’s abortive plan to eliminate value-added tax on many new-house purchases, edged up at a 0.4% rate in the fourth quarter.

But the CBS said investment in plant and equipment rose at a 12.9% rate, the first increase in four quarters.

Harel’s Klein on Monday took a minority view, saying the quarter’s rapid growth and the recovery of capital spending pointed to strong growth ahead. But most others urged caution.

“I believe that growth data going forward will more accurately reflect moderate economic growth as the January CPI points to,” said Idan Azoulay, chief of investments at Epsilon Investments.